Examining Dallas’ “Bold Plan For Greatness” Part 1

In 2004, the Dallas Symphony Orchestra initiated a 10 year strategic plan with the goal of establishing the organization as one of the top five American orchestras in artistic level and a community landmark similar to the Dallas Cowboys. Since then, I’ve had the opportunity to review Dallas’ plan and talk to their president and CEO, Fred Bronstein, about how the organization plans to reach their goals…

According to the most recent summary of the strategic plan, the DSO “pledges by the year 2015 to be one of the top five American orchestras in artistic level, a key catalyst in making Dallas a world-class city and major cultural center, and an institution uniquely rooted and ubiquitous in the community.”

The last orchestras to legitimately cross that boundary were the San Francisco Symphony and the Los Angeles Philharmonic; however, those orchestras didn’t really “displace” any of the five orchestras traditionally associated with that level of artistic accomplishment so much as augmented the cumulative total.

Nevertheless, the traditional five are all located east of the Mississippi River and the center of country has never enjoyed the presence of a top tier ensemble (although the Minnesota Orchestra is within sneezing distance and can easily cross that line assuming they can stabilize their financial issues).

Dallas’ strategic plan was delivered as a 50 page printout of a PowerPoint presentation which outlined the three phases the organization plans to implement over 10 years. Although each phase contains several components, these articles will review key portions.

The DSO is in the final stage of Phase I, scheduled to run from 2004-2006, and includes the following priorities:

  • Music Director search/hire; guest conductor upgrade
  • Audience expansion initiatives
  • Initiate branding campaign
  • Improve subscriber-donor conversion & build corporate base
  • Launch endowment campaign
  • Eliminate accumulated debt and achieve a balanced budget
  • Staff-up key areas (endowment, etc.)
  • Launch 2015 endowment campaign
  • Naturally, the goals for the initial stages for any long term strategic plan will contain the most details. Furthermore, with regard to fundraising, the largest gifts typically arrive during initial periods such as this; usually in the form of challenge gifts, etc. to help spur additional giving. As such, the type of goals Dallas set and how they plan to achieve them should be a significant gauge of the plan’s future success.

    Phase I: Music Director Search
    Their music director search is an issue which has received a good bit of national attention and, in some aspects; the organization seems to be taking an inclusive approach. On their website, the origination publishes brief guest conductor reviews written anonymously by DSO musicians. Although there are only three offerings to date, I was pleased to see that the latest offering demonstrates the musicians aren’t being compelled to write “PR driven” reviews,

    [Masestro Tortelier] is a remarkably nice man who led effective thoughtful rehearsals…Unfortunately, in performance Mr. Tortelier was so difficult to follow that it made the concerts very anxiety filled. Downbeats where rarely clear, often there were no upbeats before the downbeats…It is a shame that Masestro Tortelier’s conducting technique is so poor. He is an excellent musician with many good things to say about the music.

    Although musician input is critical in selecting the right music director, recent events in Baltimore have demonstrated that input only goes so far. It will be interesting to see how much impact the musicians’ opinions actually have on the search process. With only 4 out of 14 voting seats on the music director search committee the musician’s influence is, at best, marginal. Another shaky component is that of the four musicians on the search committee, only three were elected by their fellow musicians and one was appointed by the management.

    In light of the debacle over the Baltimore Symphony music director search process in 2005, the DSO could boost it’s credibility in the business and distinguish itself as a genuine leader in the business by increasing the number of musician votes or enacting a type of “no confidence” clause which provides the musicians with the ability to extend the search process if 100% of the musician representatives (or majority of the overall musicians) do not endorse any of the final candidates. It’s a simple component to include and would go a long way to ensure that the DSO is in the best possible position to offer a candidate the position.

    Phase I: Audience expansion initiatives
    If there’s one category which requires the DSO to make significant gains, here it is. Additionally, this category has the potential to sink the strategic plan before it even begins to build momentum. Securing capital donors to support an institution which is hemorrhaging ticket buyers isn’t an easy sell, broad based and continuous community support through high ticket sales will be a necessary component to keep this goal on track.

    Since 1999, the DSO has experienced a 27% reduction in subscribers, falling to an average of 63% of all seats sold during the 2004-2005 season. In order to combat this problem, the DSO launched a new subscriber package this season entitled Impromptu. Hopefully, this program and other audience development initiatives will be successful sooner than later in demonstrating the current administration’s ability to solve this problem.

    Phase I: Initiate branding campaign
    Although I don’t hold much faith in the concept of branding orchestras, the DSO is in a position to accomplish this goal in the selection of a new music director and hiring new musicians. If the DSO is successful in selecting individuals who can create a unique sound which sets the DSO apart from other top tier orchestras, (such as Philadelphia’s strings and Chicago’s brass) then they could legitimately create something which they can “brand” as only being able to exist in Dallas.

    In order to accomplish that goal, the organization should allocate funds into professional development for the musicians. They need to go to the players and find ways to help them communicate amongst themselves in ways they, as musicians, see fit. If the organization can help the musicians to create a positive internal culture, on their terms, then the orchestra will be much better position to develop a truly unique “Dallas” sound.

    Phase I: Improve subscriber-donor conversion, build corporate base, and launch endowment campaign
    It comes as no surprise that in order to reach the organization’s potential, it will require an influx of revenue and the DSO plans to raise $100 million by 2015. During my conversation with Fred Bronstein, DSO president & CEO, I asked him what sort of work they’ve done along the lines of capital fundraising.

    “We began by shopping the plan and visiting with potential donors to set the groundwork for the ‘asking’ portion of the campaign,” said Fred. “I don’t think you can have a capital campaign without tremendous board support. As such, we’ve assembling a committee of heavy hitters to launch the $100 million campaign.

    Our endowment has increased 43% [in value] since 2002, from $70 million to more than $100 million today, largely because of a successful campaign to endow the principal chairs of the Dallas Symphony.”

    Phase I: Eliminate accumulated debt, achieve a balanced budget, and staff-up key areas
    Although this is a popular priority among many orchestras these days, I’m not certain it should be a hard-and-fast rule for orchestras entering periods of planned “next level” expansion. During our conversation, Fred said that in order to reach the plan’s objectives, the DSO will need to grow its annual operating budget from $23 million to approximately $31 million (or $40 million after adjusting for inflation).

    In order to increase the budget to those levels, the DSO will undoubtedly require additional staff and administrative resources. Typically, non-artistic expenditures will increase at a higher rate than artistic expenditures during the initial stages of expansion and as the plan reaches the final stages, non-artistic spending will level out while the artistic spending increases at a faster rate.

    Although a strict balanced budget policy would tend to make the above tasks more difficult than not, there was some evidence in my conversation with Fred that the DSO plans accelerate non-artistic spending during the initial stages phases of the plan ahead of artistic expenditures in a way that Fred described as “pay-as-you-go”.

    “I wanted to secure a five year labor contact with the musicians so [artistic expenditures] wouldn’t be an issue [and now] our labor costs are a known quantity now through 2009,” said Fred. “This was an agreement reached early and without acrimony. We’re in the second year of a 5-year agreement.

    Our approach to this strategic plan is ‘pay as you go.’ The ambitions are real and they’re also tempered by a practicality and business-like approach. When we look at strategic initiatives, we discipline ourselves so that we don’t undertake projects without committed support in place. It’s that simple. Which is why I call it ‘pay as you go’. However, I stand by our current five year contract with the musicians completely, although I do consider everything on the table and flexible over the next 10 years, especially if it’s a critical component in reaching our goals.”

    Although these components of the strategic plan contain some contradictory measures of success, the following component can easily work to marginalize those conflicts.

    Phase I: Launch 2015 endowment campaign
    One of the strongest components of Dallas’ plan is the inclusion of a “Big Endowment." By the end of the plan, Dallas hopes to establish a $218 million endowment capable of covering 25% of the annual budget on a fixed 5.25% draw. Although this figure falls short of an ideal amount any orchestra with a $40 million annual budget should accept, it is still within acceptable tolerances.

    During my conversation with Fred, he said the DSO plans to raise 20%-25% of these funds by 2007-2008 and keep high-level gift pledges within a five year time frame. This plan falls right in step with how most organizations go about instituting long-term strategic fundraising initiatives. Consequently, how well Dallas does at reaching those initial goals will establish the tone for future success.

    Although these figures may seem like large sums of money, keep in mind that the Nashville Symphony raised over $110 million for their new concert hall over a period of only five years, and that was immediately following a successful two-and-a-half year $25.5 million endowment campaign.

    In Part 2, we’ll continue to explore Dallas’ “Bold Plan For Greatness” by examining the plan’s second phase.

    About Drew McManus

    "I hear that every time you show up to work with an orchestra, people get fired." Those were the first words out of an executive's mouth after her board chair introduced us. That executive is now a dear colleague and friend but the day that consulting contract began with her orchestra, she was convinced I was a hatchet-man brought in by the board to clean house.

    I understand where the trepidation comes from as a great deal of my consulting and technology provider work for arts organizations involves due diligence, separating fact from fiction, interpreting spin, as well as performance review and oversight. So yes, sometimes that work results in one or two individuals "aggressively embracing career change" but far more often than not, it reinforces and clarifies exactly what works and why.

    In short, it doesn't matter if you know where all the bodies are buried if you can't keep your own clients out of the ground, and I'm fortunate enough to say that for more than 15 years, I've done exactly that for groups of all budget size from Qatar to Kathmandu.

    For fun, I write a daily blog about the orchestra business, provide a platform for arts insiders to speak their mind, keep track of what people in this business get paid, help write a satirical cartoon about orchestra life, hack the arts, and love a good coffee drink.

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